A British parliamentary committee has called for a crackdown on sports supporter tokens and recommended the government issue a code of conduct for NFT platforms.
A bipartisan parliamentary committee has called on the British government to safeguard creators from copyright infringement caused by nonfungible tokens (NFTs) and address possible consequences from athletic organizations issuing digital assets.
In a press release dated October 11, members of the Culture, Media, and Sport Committee warned that the “most pressing issue” was the risk to artists’ intellectual property rights posed by the simplicity and speed with which NFTs can be created, compared to the lengthy process for artists seeking to enforce their rights.
“Artists are at the risk of seeing the fruits of their hard work pinched and promoted without permission, while fraudulent and misleading adverts add an extra layer of jeopardy for investors involved in what is already an inherently risky business,” said committee chair Dame Caroline Dinenage.
The committee proposed in an accompanying report that the government cooperate with NFT marketplaces to address these infringements by establishing a code of conduct that safeguards sellers, buyers, and artists against illegal and perhaps fraudulent content offered on such platforms.
The committee also cautioned about the potential dangers of sporting leagues or teams creating cryptocurrencies to offer to supporters and advocated for the prohibition of such digital assets.
Numerous football clubs in the United Kingdom, including Manchester City and Tottenham Hotspur, have released “fan tokens” to their supporters and club members.
The purchase of these tokens is supposed to confer exclusive privileges and advantages, but according to the committee, this is frequently not the case.
“We are also concerned that clubs may present fan tokens as an appropriate form of fan engagement in the future, despite their price volatility and reservations among fan groups,” the report said.
The committee claimed that the volatility of these tokens could cause monetary damage to fans who were unaware of the asset’s “inherently risky” nature.
“In the world of sport, clubs are promoting volatile crypto asset schemes to extract additional money from loyal supporters, often with promises of privileges and perks that fails to materialize.”
The committee reached the conclusion that “any measurement of fan engagement in sports, including in the forthcoming regulation of football, should explicitly exclude the use of fan tokens.”
